UNIVERSAL SERVICE OBLIGATION The case for change

Moving to a five-day-a-week letter service is essential to protecting our Universal Service and securing Royal Mail’s long-term future.

It’s no secret that letter volumes have been in steep decline for the past two decades as consumer needs change. But the current Universal Service Obligation (USO) is still designed for letters in a preinternet age.

In November, we announced we had asked the Government to move to a five-day-a-week letter service – Monday to Friday – while continuing to improve parcel services, to protect the long-term sustainability of our one-price-goes-anywhere service.

In 2004/05, Royal Mail delivered 20 billion letters. That’s an average of two letters to every door, every day. This fell to eight billion in

2020/21. Current projections indicate that this will halve again over the next decade to four billion – which is less than one letter to every door, every other day. Parcel volumes on the other hand have grown, on average, 10% a year.

“By moving to a Monday to Friday letter service and focusing on parcels at weekends, we believe there will be an opportunity to offer different working patterns, which will include more Saturdays off,” says chief people officer Zareena Brown. “These changes will enable us to grow the business in a more financially sustainable way, which is the best way to secure job security in the long term –something we all want.”

What are our customers saying?

Ofcom’s research in 2020 showed that a five-day (Monday-Friday) letters service would meet the needs of 97% of consumers and SMEs.

Royal Mail’s own research, including consumer workshops up and down the country in 2022, found the same. It found little or no statistical difference across England, Scotland, Wales and Northern Ireland or low income, rural or elderly consumers.

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Most recently, The Sunday Times readers’ poll in January 2023 asked: Would it matter if the post was no longer delivered on Saturday? Of the 11,259 results entered, 18% said yes and 82% said no.

Director of corporate affairs Jenny Hall adds: “These proposals are about ensuring that Royal Mail can grow and remain competitive in a fastmoving industry.

“The current financial position of Royal Mail means this change is critical. Although we’re undergoing a major transformation process, this will not be sufficient in itself to put the business back on track. Moving to five days is essential to ensuring Royal Mail’s long-term future.”

Next steps

A Government spokesman says there are “no current plans to change the Universal Service”. “While we recognise the issues that Royal Mail raise, there would need to be a strong case that showed changes would meet reasonable needs of users of postal services and ensure the financial sustainability of the universal postal service.”

We continue to work with the Government and Ofcom to make the case for change and will keep you updated.

It’s not just a UK trend

Change is already happening across Europe, where Universal Service Providers are responding in various ways to address declining letter volumes:

France

La Poste recently announced that customers can now only buy a green stamp that guarantees delivery within three working days when sending a letter in France. A new e-letter type system has been developed for correspondence that needs to be delivered the next day.

Denmark

In 2019, PostNord introduced a change so standard letters are only delivered one day a week.

Norway

The latest change saw Posten implement a reduction in the delivery frequency of letters from five to two-anda-half days a week in 2019.

Finland

For more than five years, Posti has implemented a reduced delivery frequency in urban areas from five to three days.

Netherlands

In 2014, PostNL saw the discontinuation of Monday delivery for letter mail.